NATIONAL REMOTE AND REGIONAL TRANSPORT STRATEGY

Transcription

1 NATIONAL REMOTE AND REGIONAL TRANSPORT STRATEGY Consultation Draft 22 May 2015

2 Important Note This document has been released for public consultation purposes only and does not constitute government policy at State,

3 Table of Contents 1 INTRODUCTION About the National Remote and Regional Transport Strategy National Remote and Regional Transport Framework Scope and purpose Implementation Plan CONTEXT Snapshot: remote and regional Australia Why we need a national remote and regional transport strategy Current picture: remote and regional transport Current policy context KEY ACTIONS Strategic Area 1: Transport Infrastructure Objective Stakeholder priorities Challenges and opportunities Actions to be taken Strategic Area 2: Transport Services Objective Stakeholder priorities Challenges and opportunities Actions to be taken Strategic Area 3: Transport Regulation Objective Stakeholder priorities Challenges and opportunities Actions to be taken HAVE YOUR SAY ON THE DRAFT STRATEGY... 25

4 1 INTRODUCTION 1.1 About the National Remote and Regional Transport Strategy The National Remote and Regional Transport Strategy provides for the first time a nationally coordinated approach for addressing transport infrastructure, service delivery and regulation challenges that are specific to remote and regional Australia. The remote and regional areas of Australia are major contributors to the nation s economy being home to world-class resource and agricultural industries. When combined, these areas are responsible for 40 per cent of Australia s GDP. Remote and regional areas face specific transport challenges due to a combination of vast distances, a small population, climatic extremes, and demanding geography challenges that require a more tailored approach to transport regulation, infrastructure and service delivery. This Strategy aims to directly address this problem by providing some practical solutions to the issues and challenges faced by transport system providers and users that will ensure this vital part of Australia can continue to grow and contribute to the nation s overall prosperity. The Transport and Infrastructure Council s decision to develop a National Remote and Regional Transport Strategy was based on the outcomes of a National Remote and Regional Transport Infrastructure and Services Forum (Alice Springs Forum) held in May The Alice Springs Forum not only identified issues and potential solutions across the key areas of transport infrastructure, services, and regulation, it reinforced the critical need for a strategic approach to remote and regional transport. This Strategy provides new approaches for addressing transport infrastructure, service delivery and regulation challenges specific to remote and regional Australia. By guiding and influencing policy development relevant to remote and regional transport, the Strategy seeks to maximise investment opportunities in transport infrastructure and services, minimise the regulatory burden, and facilitate better coordination across borders and between governments. The Strategy s long term goals are: To unlock the economic and social potential of remote and regional areas through the development of appropriate transport infrastructure, services and regulation: To enhance access to employment, education and health services across remote and regional Australia by improving transport infrastructure and services; To ensure that the growth of transport infrastructure and services in remote and regional areas is sustainable and reflects the needs of local residents, transport operators, service provision and businesses; and That policy and regulation is aligned across similar environments (i.e. cross border remote areas). This Strategy outlines a number of actions that will help achieve the objectives and long term transport goals in remote and regional areas. A framework for the Strategy is set out at Figure 1. P a g e 1

5 IMPLEMENTATION MONITORING AND REPORTING Draft National Remote and Regional Transport Strategy 1.2 National Remote and Regional Transport Framework Figure 1 National Remote and Regional Transport Framework VISION To unlock the economic and social potential of remote and regional Australia through appropriate transport infrastructure, services and regulation. OBJECTIVE To maximise investment opportunities in transport infrastructure and services, minimise regulatory burden, improve coordination across borders and governments, and influence policy development relevant to remote and regional transport. KEY AREAS OF FOCUS STRATEGIC AREA 1: TRANSPORT INFRASTRUCTURE Increasing investment opportunities in transport infrastructure and related services through appropriate funding methodology and investment partnerships. Infrastructure planning and development takes into account maintenance costs. Infrastructure design and quality are appropriate to remote and regional environment, including needs of local communities and businesses operating in these areas. STRATEGIC AREA 2: TRANSPORT SERVICES Better access to transport services through improved coordination across transport modes and jurisdictions. Increasing economic and employment opportunities for remote and regional communities. Higher costs of service provision in remote and regional areas taken into account in service design and funding. Improving access to telecommunication services in remote and regional transport routes. STRATEGIC AREA 3: TRANSPORT REGULATION Minimising regulatory burden and inconsistency in transport regulation and standards. A risked-based approach to regulatory requirements and access conditions. Unlocking transport infrastructure and services opportunities through regulatory amendments. DESIRED LONG TERM OUTCOMES Economic and social potential of remote and regional areas is unlocked, and contribution toward Australia s economic growth further increased. Access to employment, education, health services and economic opportunities across remote and regional areas is enhanced through existence of appropriate transport infrastructure and services. Growth of transport infrastructure and services in remote and regional areas is sustainable and reflects the needs of local residents and businesses. Policy and regulation across similar environments (i.e. remote outback cross-border) is aligned where appropriate. P a g e 2

6 1.3 Scope and purpose The National Remote and Regional Transport Strategy sets out a national approach to addressing remote and regional transport issues and provides practical solutions, informed by consultations with industry and across governments. This Strategy targets remote and very remote areas of Australia (as defined under the Australian Bureau of Statistics Accessibility Remoteness Index of Australia) including nearby regional towns that service these areas. While the Strategy is intended to focus largely on remote and very remote areas it recognises that some parts of outer regional Australia experience similar issues. This Strategy also recognises that while transport issues and challenges maybe similar across some remote and regional areas, the degree to which they impact in outer regional, remote or very remote locations can vary. Also, while two areas may both be very remote, transport infrastructure in the two areas may face different climatic demands. To this end, some of the Strategy s actions will be targeted to certain geographical locations. Figure 1: Remoteness Classes, ABS Australian Statistical Geography Standards (ASGS) 2011 These areas differ from the main cities of Australia in that they: have smaller populations meaning diseconomies of scale; are situated vast distances from major towns and cities; have little or restricted access to services, social interaction, jobs and employment opportunities; have limited or no services locally available; have lower quality of transport infrastructure (i.e. roads - many unsealed); P a g e 3

7 experience extreme climatic weather; and are often isolated from the rest of Australia due to geographical and /or seasonal constraints (i.e. road closures in remote areas during the wet season). The Strategy focuses on three priority areas that are critical to achieving its desired long term outcomes: (i) transport infrastructure; (ii) transport services; and (iii) transport regulation. For the purpose of this Strategy, the following definitions are applied: transport infrastructure civil engineering structures and technology that have been built or applied to facilitate the movement of people and or/goods. This includes roads, railways, airports, sea ports, and barge landings; transport services the regular operation of transport infrastructure or related activities to connect people, places, goods and other services. This includes bus/coach and rail travel, public transport, air travel, community transport and coastal shipping; and transport regulation the government controls put in place to manage market distortions, or ensure safety and security outcomes. This Strategy will underpin other important national priorities that are in progress or under development such as the developing northern Australia agenda, heavy vehicle regulation and pricing reforms and the Northern Australia infrastructure audit. 1.4 Implementation Plan To ensure the Strategy is linked to more detailed key actions, an Implementation Plan will be developed to accompany the final Strategy. The Implementation Plan will outline: which jurisdiction or organisation will have lead responsibility for each action; the specific tasks and any governance arrangements required to implement each of the Strategy s actions; key timeframes commencement and completion dates for actions over the short, medium and long term; how the Strategy s actions will link in with other national priorities such as the developing northern Australia agenda; and which actions apply to very remote, remote or outer regional locations or where they are targeted to certain geographic conditions. The Implementation Plan will provide transport industry peak bodies and other key stakeholders the opportunity to collaborate with government on implementing the Strategy. P a g e 4

8 2 CONTEXT 2.1 Snapshot: remote and regional Australia Population and demographics Over 96% of Australia s land mass is classed as outer regional, remote and very remote by the Australian Bureau of Statistics Accessibility Remote Index of Australia. 15% of the Australian population live 50 km outside the coastal areas of Australia. The majority of the remote and regional population (5% = over one million) live in northern Australia (broadly defined as the parts of Australia north of the Tropic of Capricorn). Northern Australia s population is expected to continue to grow above the national average of 1.5% (ABS 2014) based on an annual population growth of 1.9% over the past decade. Economy Remote and regional Australia contributes significantly to Australia s economy. With its considerable resource and primary industry sectors, remote and regional Australia is responsible for 40% of Australia s GDP. The remote and regional economy is fuelled by the primary production sector (pastoral, horticultural and agriculture, carbon farming, fisheries and aquaculture), tourism, manufacturing and mining. Over 60% of the nation s mining platform operate in remote Australia. Natural resources Remote and regional Australia contains a number of the world s largest resource provinces and mines including the Pilbara iron ore province (Pilbara region is responsible for almost a third of the world s iron ore production), Bowen Basin coal province, Argyle Diamond Mine, Mount Isa lead-zinc province, Leigh Creek coal mine and the world s largest manganese mine at Groote Eylandt. Australia s only producing phosphate mine is near Mount Isa and there are vast quantities of bauxite at Gove in the Northern Territory and Weipa on Cape York in Queensland. There are also substantial reserves of gas through the region. The coastal districts of the northern regions produce sugar cane, grain, fruit, dairy and beef cattle. Intensive irrigated agriculture is also an important producer of income in regions. P a g e 5

9 2.2 Why we need a national remote and regional transport strategy Current picture: remote and regional transport Despite past government investment in remote and regional transport infrastructure, the need to develop suitable infrastructure and services in these areas remain crucial. Some existing transport infrastructure is not up to the task of transporting raw material, livestock and produce over extensive distances in the face of extreme weather conditions. In its report to the Parliament of Australia in September 2014, the Joint Select Committee on Northern Australia identified that industries and communities in north Australia are heavily reliant on the road network, with few alternative routes, for example: In north Western Australia, the Great Northern Highway is the only sealed road linking with the Northern Territory and other centres in Western Australia. The Northern Territory has only five major sealed roads outside Darwin. Queensland has a more extensive highway system but there is heavy reliance on access roads that are not highway grade or are frequently flooded. Railway networks and port connectivity in the north are underdeveloped. The Kimberley region does not have railway lines- railways in the north-west region of Western Australia are not connected to the rest of Australia and there is no railway between the Northern Territory and Queensland. Limited rail options can put further pressure on road networks, depending on the size and nature of the freight task. Similar challenges are faced in outback remote areas of South Australia. The South Australian Government manages approximately 10,000 km of roads in unincorporated area of the state. The majority of these roads are unsealed and include key outback routes (Birdsville, Strzelecki, and Oodnadatta tracks) linking key centres in outback South Australia and provide access for communities, tourism, mining and pastoral activities. Similar issues and challenges are experienced at varying degrees in the remote and regional areas of New South Wales, Victoria and Tasmania. For example, Tasmania has a small and highly dispersed population of just over 500,000, with over 60 per cent of the population living outside of Hobart. Efficient and sustainable transport connections, including for interstate trade, are crucial to regional community wellbeing, productivity and industry growth throughout Tasmania. P a g e 6

10 SNAPSHOT: ROADS Northern Territory The NT s road network spans 35,725 km made up of roads that are sealed (8,927 km), gravel (8,597), formed (7,203), and unformed (10,998 km). Access can be significantly affected by weather and local conditions. The NT Government manages 62% of the NT s road network. The remainder is managed by local government which ultimately relies on the NT and Australian Governments for road funding because road costs far exceed what local governments can raise from their small ratepayer base. South Australia The SA Government is responsible for 10,100 km of outback roads. This is due to there being no local government in outback SA. In addition, the SA Government contracts an external party to look after 4,000 km of roads in the Anangu Pitjantjatjara Yankunytjatjara lands which is a significant funding challenge despite funding from the Australian Government s Road to Recovery Program. Queensland Queensland has some 186,766 km of public roads. The Queensland Government manages 33,353 km of State-controlled roads. These roads comprise the major traffic carrying and strategic roads in the state. The management of the state-controlled roads is considered from four strategic perspectives represented by the following subsets: national network 5,017 km; state strategic roads 4,084 km; and regional and district roads 24,252 km. The Queensland Government also works with local governments in jointly managing 35,923 km of lower order State-controlled roads and higher order local government roads (Local Roads of Regional Significance - LRRS) through the Roads and Transport Alliance. There are 13,098 km of LRRS State-controlled roads. Western Australia In WA, the five geographical regions categorised as remote (Kimberley, Pilbara, Gascoyne, Goldfields and Mid-west), contain a total of 64,672 km of roads. Of these, 16,185 km are sealed and 48,487 km unsealed. The WA Government currently manages 17% of roads in the five regions, with the remainder being the responsibility of local government authorities. New South Wales In NSW, the road network consists of 18,028 km of state roads (including 4,269 km of National Road Network, for which the Australian Government provides a funding contribution, and 163 km of privately-funded toll roads) and 2,946 km of regional and local roads in the unincorporated area of NSW. The NSW government also provides financial assistance to local councils to manage 18,474 km of regional roads and also provides some funding and support to the 144,750 km of council-managed local access roads. Victoria In Victoria, there are approximately 151,000 km of roads open for general traffic, including local municipal roads, this total also comprises 22,500 km of freeways and arterial roads. Additionally there is a further 50,000 km of other minor roads and tracks in parks and forests. The Victorian arterial road network carries approximately 350 million tonnes of freight annually. Tasmania The land transport network in Tasmania includes approximately 24,000 km of road. Of this, 3,700 km is managed by the Tasmanian Government and 14,000 km by local government, with the remainder being privately or commercially owned. The principal road corridor between Burnie and Devonport in the north and Hobart in the south is part of Tasmania s highest volume freight corridor, connecting the state s major ports with population centres and industrial centres. Economic and social development in remote and regional Australia will continue to face challenges such as: urban and remote/regional projects cannot be directly compared because the benefits are different; some roads are constructed for dry season conditions and closed or subject to tighter weight restrictions during the wet season therefore reducing access for local producers and isolating communities; access to employment, education, health services, and economic opportunities potentially limited by lack of adequate infrastructure and services; residents and businesses operating in remote and regional areas facing safety and efficiency losses by only having access to lower quality roads; business opportunities constrained by lack of all-weather access across remote and regional areas; P a g e 7

11 higher capital start-up costs for transport providers to service remote communities due to vast distances, low population and extreme remote environment; the business, social and safety impacts of limited telecommunications infrastructure and service coverage; inappropriate standards and regulation hindering economic and social development; and the need to use relatively more expensive transport options due to long distances and limited land transport options, in particular charter and other aviation services. These types of challenges underpin the case for affording priority to a Strategy that will enable a coordinated approach at the national level that focus specifically on remote and regional transport issues. SNAPSHOT: AVIATION Western Australia Infrastructure at a number of large fast-growing regional airports such as those in the Pilbara is inadequate to meet current levels of demand. Significant upgrades are required to meet forecast growth in air traffic. The funding of the repair and replacement of ageing infrastructure at local government-owned airports is problematic where levels of airport usage and revenues are insufficient to meet the costs involved. Northern Territory The NT Government currently maintains 70 remote aerodromes and provides operational funding for 16 Registered aerodromes to ensure some safety regulatory requirements are met. Meeting the increasing demand for infrastructure upgrades and high cost of repairs and maintenance is a major challenge. Local government do not have the capacity to take on formal operational and management responsibility for these aerodromes. This is due to the lack of operational commercial viability, high resource and cost implications of regulatory requirements, the level of risk imposed by being responsible for aerodrome activities, low rate base of many local government areas, and with 50 of the aerodromes on Aboriginal Land, the lack of ownership or tenure of the land. South Australia There are 72 regional airports that cater to occasional commercial charter services as well as providing emergency services to remote parts of SA. It is a challenge for many regional councils to meet the maintenance required on aerodromes, with many built during the second world war. Simply maintaining existing airport infrastructure in a safe and usable condition is even more challenging in remote areas. Queensland There are over 54 certified or registered aerodromes in northern Queensland, about 30 with regular passenger services recording over 9.7 million passenger movements. Costs of operation of regional services are being unduly increased by regulation issues, high costs of fuel in remote airports, airport fees, poor facilities development limiting aircraft sizes, and limitations of size of market. New South Wales In 2010, there were 10 airlines operating services to regional New South Wales to 27 regional airports. The regional communities of Bourke, Coonamble, Lightning Ridge, Walgett, Coonabarabran, Gunnedah, West Wyalong and Inverell lost their regular public transport (RPT) services during this time. In 2014, only five airlines provided regional air services to 22 airports across New South Wales. Victoria There are 159 airports and airfields across Victoria. Key regional airports support passenger and freight needs and provide Regular Public Transport (RPT) and charter air service connections to / from: Melbourne, Essendon and Moorabbin Airports); regional areas of Mildura, Mt Hotham, Portland and Warrnambool; and beyond Victoria (south east South Australia, southern NSW), and northern Tasmania. Commercial scheduled services to these areas are provided variously by Qantaslink, Virgin, Regional Express, Sharp Airlines, King Island Airlines and Par-Avion Airlines. Additional charter services provided by other airlines. Tasmania Tasmania has four airports servicing its urban centres (Hobart, Launceston, Devonport and Burnie) and a number of smaller regional airports supporting interstate and intrastate passenger movements. These airports are serviced by several major commercial carriers and a number of smaller companies operating low volume regional routes. The cost and frequency of air access are particularly critical for the sustainability of regional communities on King Island and the Furneaux Group of islands. P a g e 8

12 2.2.2 Current policy context All levels of government have been involved in a number of significant national transport reforms in recent years, coupled with considerable investment in transport infrastructure in remote and regional areas. Examples of this effort include: targeted upgrades to the Stuart, Eyre, Augusta and Barrier Highways and Strzelecki Track to improve the efficiency and safety of truck and tourist vehicle movements through the South Australian region; projects on the Great Northern and North West Coastal Highways in Western Australia, as well as at Port Hedland and Dampier, to improve freight and passenger movements, in particular supporting the resources industry; planned upgrades for the Outback Way through Queensland, the Northern Territory and Western Australia; upgrade to the Tanami Road in the Northern Territory; Northern Territory Road Package (improving flood immunity, road safety and productivity) and Regional Roads Productivity Package; Port Hedland Improvements Project; $128 million for Community Development Grants in northern Australia, funding a range of small scale community infrastructure; rail overpass south of Alice Springs; upgrades to aerodromes in the far north of South Australia to improve 24 hour all weather capability aerodromes for Royal Flying Doctor Service operations; targeted driver education and licensing programs currently running in Western Australia, Northern Territory and South Australia that enable those living in remote areas to obtain a driver s license locally; the Royalties for the Regions funding program running in Western Australia where a portion of mining revenue is put towards the construction of new and improved regional infrastructure, roads and floodplain security projects; subsidisation of some long distance passenger transport services so that residents of rural and remote communities in Queensland can access a range of services in larger centres; the Aboriginal and Torres Strait Islander (ATSI) Transport Infrastructure Development Scheme program running in Queensland that focuses on improving transport access to ATSI communities and supporting development in the regions (e.g. tourism, freight transport in and to remote areas); essential weekly air transport links for very remote communities are provided by the Australian Government s Remote Air Services Subsidy Scheme. Flights are supported for some 350 remote communities (cattle stations and Indigenous communities)including for example residents of Cape Barren Island and the Bass Strait; collaborative efforts between the Victoria Government and the Central Murray group of councils in the development and implementation of a regional transport plan as part of addressing transport network efficiency in the region; P a g e 9

13 the Regional Transport Coordination Program running in New South Wales focusing on reducing the negative effects of transport disadvantage on those living in rural and regional areas; and upgrade of the Midland Highway, revitalisation of the freight rail network, and upgrades on the Tasman and Brooker Highways in Tasmania. While these efforts are contributing to better transport infrastructure and services in remote and regional areas the existing inconsistencies in transport standards and regulation across jurisdictions highlight the need for a coordinated approach at the national level. CASE STUDY: ABORIGINAL AND TORRES STRAIT ISLANDER TRANSPORT INFRASTRUCTURE DEVELOPMENT SCHEME (QLD) The Aboriginal and Torres Strait Islander (ATSI) Transport Infrastructure Development Scheme (TIDS) is a component of the Queensland Government s broader TIDS funding program providing $8.2 million annually to improve transport access to ATSI communities and support development in the regions (e.g. tourism, freight transport in and to remote areas). ATSI TIDS funding has significantly improved access to 34 indigenous communities, with over 25% of the access roads to these communities now bitumen sealed, and upgrades to many aerodromes, barge ramps and jetties. The Queensland Government plays a role in capacity building for these regional Indigenous councils and workforces by providing supervisory services to assist councils in delivery of the ATSI TIDS program. CASE STUDY: ROYALTIES FOR REGIONS SCHEME- WAGIN AIRPORT UPGRADE (WA) The town of Wagin is located 228 km south east of Perth in the Great Southern region. Wagin Airport is centrally located and covers a radius of 250 km taking in most of the south west of WA. The airport has two runways and is close to the townsite. The Shire of Wagin received Royalties for Regions funding to seal the airport s east/west runway. Without this funding the project would not have proceeded. The total cost of the project was $546,974. Of this, $386,163 came from Royalties for Regions through funding allocated to the Department of Transport, Regional Airports Development Scheme (RADS), with an additional $160,811 from the Shire of Wagin. The need for this runway upgrade was due a severe storm that softened the then gravel runway which resulted in propeller damage to a Royal Flying Doctor Service aircraft as it landed. CASE STUDY: DRIVESAFE NT DRIVER LICENSING PROGRAM (NT) Providing a system for licensing drivers in remote communities in the NT is a major challenge due to: vast numbers of small scattered remote populations; inability of many remote residents to provide evidence of identity; literacy, numeracy and language barriers; lack of access to qualified driving instructors, registered and roadworthy vehicles and supervising drivers during the learner licence period. DriveSafe NT Remote was developed to address these problems. DriveSafe NT Remote is a driver licensing program for remote and regional areas. This program helps to: improve access to jobs, training and services; reduce the high number of Indigenous people killed or injured on NT roads; and reduce the high number of Indigenous people charged with driving related offences. The program includes support to gain required identification documents, theory and practical lessons on a range of driving and road safety topics such as drink driving, seat belts, overcrowding in vehicles, emergency first aid and speed. In the first two years of the program, over 1300 Territorians received their learner licence and 350 of these progressed to a provisional licence. P a g e 10

14 CASE STUDY: INFRASTRUCTURE TO SUPPORT ECONOMIC RECOVERY (TAS) Like many remote rural communities in mainland Australia, the west coast region of Tasmania features a number of isolated communities, which are disadvantaged by not experiencing the same growth and breadth of opportunities as larger urban centres. The west coast region continues to grapple with industry closures, resultant high unemployment, issues with transport and communication infrastructure and the persistent outward migration of the population, in particular its young people. In light of a decision by one of the west coast s central employers to move the Mt Lyell mine in Queenstown to care and maintenance in June 2014, the Tasmanian Government established a working group to address the region s challenges. This has resulted in a range of initiatives focused on investment in new industries, underpinned by improved infrastructure, skills and vocational training and access to new markets. As part of this economic recovery package, the Tasmanian Government fast-tracked $13.2 million of capital improvements for regional roads and $100,000 for a pilot program to extend public transport services in the region. Continued planning and investment in transport system improvements to support the central export sectors of this region, such as mining and aquaculture, remain a key priority for Tasmania. CASE STUDY: REGIONAL TRANSPORT STRATEGIES (VIC) In Victoria, groups of regional councils work collaboratively with State transport portfolio representatives to develop regional transport strategies. Regional transport strategies identify and prioritise key transport networks and provide an evidence base for improvements and investment. Some of the regional transport networks include cross border groupings that include participants from both local councils and neighbouring state departments and agencies. P a g e 11

15 3 KEY ACTIONS 3.1 Strategic Area 1: Transport Infrastructure Objective To maximise investment opportunities that will result in remote and regional areas having access to transport infrastructure that is fit-for-purpose, suitable to remote and regional conditions, appropriately funded and well maintained Stakeholder priorities Stakeholder priorities in this area include: Increasing investment opportunities in transport infrastructure and related services through appropriate funding methodology and investment partnerships. Infrastructure planning and development takes into account whole of life maintenance costs. Infrastructure design and quality are appropriate to remote and regional environment, including remote communities Challenges and opportunities A key message received from stakeholders including agriculture, tourism, mining and energy industries is that a lack of appropriate infrastructure can constrain economic development in remote and regional areas. For example, in the mining industry, the first thing that some companies will look at as part of exploration is whether infrastructure exists. Some will only go ahead with small-scale projects so they do not over-capitalise until they understand the true cost of working in some of the most remote parts of Australia. SNAPSHOT: ECONOMIC OPPORTUNITIES CONSTRAINED (NT) 1 Part of the reason that this region (Plenty Highway) is under-explored is its remoteness and lack of ease of access. We recognise that with exploration, one of the first things that will be looked at is what infrastructure exists, so there are hurdles. (Mining company) The road is terrible. We have to specify high quality tanks for the 500 km of corrugated road. Sophisticated loading systems get pulverised. (Oil and gas company) We are working in one of the remotest parts of Australia. Everything breaks down on the way out. There is wear and tear on the trucks we have trouble getting quotes because of the damage it does. When we built the pilot plant, everything arrived broken; including the safe that they said couldn t break even with explosives. (Mining company). for the trucking industry, it s four times more expensive to operate on a dirt road because of the damage. Sealing a road might open it up to more competition. For example, an Alice Springs (operator) was caring fuel up the Tanami and he had to buy a new set of springs to complete the return trip. (Road transport industry) A major challenge facing remote and regional areas is to ensure the consideration of broader benefits not captured by Cost Benefit Analysis (CBA) methodology when seeking to access funding for infrastructure projects. 1 July 2014 consultations conducted by the NT Department of Transport on a separate project. P a g e 12

16 The National Guidelines on Transport System Management discuss how broader equity considerations are currently addressed, namely: Initiatives in less densely populated areas tend to achieve lower usage rates. Benefit cost ratios are therefore generally lower, making it more difficult for initiatives to pass the economic efficiency test of the CBA. In these cases, government policy may require greater weight to be given to social, access or equity objectives, relative to economic efficiency (i.e. CBA results). The Guidelines cater for this through the Strategic Merit Test (SMT), the Appraisal Summary Table and the adjusted CBA. Business cases usually also contain explicit reporting of distributional, equity and social impact assessments. The SMT results can be reported at multiple levels (e.g. high pass, low pass, fail) to highlight initiatives that score particularly well on achieving government objectives. Adjusted CBAs can include a distributional multiplier to tilt the assessment process in favour of initiatives that benefit certain communities (e.g. regional areas). It is still important to undertake a CBA so that initiatives with negative net benefits (net present value < 0) will only be approved where the initiative is considered highly desirable for other reasons. While there are mechanisms that can be applied to adjust the CBA for the benefit of regional areas, there is some conjecture in remote and regional areas that cost benefit analysis does not work as a tool to assess the business case for investment for regional road projects. This view is driven by a range of factors, including: Regional roads typically have a higher cost profile: Both capital and maintenance costs for remote and regional roads are typically higher than metropolitan comparisons. This is driven by higher costs associated with the transport of inputs, access to suitably qualified contractors and the impact of extreme weather events on lower quality roads in some areas. Lower volumes equate to lower benefits: Benefit streams identified in the Austroads Guide to Project Evaluation are calculated as a function of the number of vehicles travelling along a given road, combined with the quality of the road before and after any proposed investment. Accordingly, lower traffic counts on regional roads, particularly when combined with higher construction costs, can create a challenging set of circumstances for a remote based project to achieve a positive benefit cost ratio. The CBA methodology is designed to identify projects with the highest economics benefits (which are generally urban projects due to significantly higher traffic volumes). However, it is by no means the sole consideration when assessing projects. Instead it is one of six considerations used to assess projects under the National Land Transport Act 2014 including economic, environmental and social costs or benefits. SNAPSHOT: EXPLORING FUNDING OPTIONS FOR REMOTE AND REGIONAL ROADS NATIONAL PROJECT The Northern Territory is leading a national project to examine the challenges for road providers in remote and regional areas. The project will: analyse current road funding arrangements and processes across Australia and consider the short and long term implications for remote and regional areas; consider the economic impacts of the lack of investment in road infrastructure in key remote and regional locations, analyse the social benefits of road investment, including supporting closing the gap on Indigenous disadvantage, and examine options for alternative funding for remote and regional areas. P a g e 13

17 The formula used for distributing maintenance funding can also present a challenge for remote and regional areas. The distribution formula is based on: one third total lane kilometres; one third vehicle kilometres travelled; and one third equivalent standard (ESAs) axels kilometres travelled. Two thirds of the maintenance funding distribution is based on traffic volumes (e.g. one third heavy vehicles and one third all traffic) whereas much of repairs and maintenance and road deterioration is due to non-traffic factors. For example, bitumen oxidises at the same rate independent of traffic. Linemarkings and signs also deteriorate at the same rate independent of traffic. With extreme climatic conditions experienced in some remote areas, maintenance needs to be more frequent in these areas as infrastructure can be more prone to damage. New approaches to quantifying the broader benefits of infrastructure investment in remote areas including improved health, education and transport safety outcomes are required in order to ensure greater consideration of remote and regional infrastructure projects. Remote and regional transport infrastructure design must be fit-for-purpose, focus on sustainability and factor in whole-of-life costs. Appropriate maintenance funding required over the life of the asset must be set aside. It is envisaged that establishing a national infrastructure planning and assessment guideline that reflects remote and regional transport needs, will enable better planning by governments going forward. SNAPSHOT: AVIATION (SA) Remote and regional airports / airstrips in South Australia are chronically unfunded, both for major maintenance and capital works, due to the limited resources of their community owners. While the SA Government matches Australian Government funding (Remote Airstrip Upgrade Program), the funding is insufficient and also limited by the program s narrow criteria. SNAPSHOT: INFRASTRUCTURE ROAD MAINTENANCE (NT) Modelling undertaken by the NT Department of Transport indicates that about $38 million per annum is required to maintain the current performance standards on its portion of the National Highways as compared to the current allocation of $16.77 million, resulting in a shortfall of $21.23 million per annum. With State, Territory, and Australian Governments facing fiscal constraints, this Strategy encourages continued investigation into ways of improving infrastructure investment linkages between governments, the private sector and community entities to help develop and maintain transport infrastructure and services with a view to establishing a functional framework. Such partnerships have the potential to benefit industry and local communities through helping improve transport infrastructure design and quality, access to services, and better maintenance of roads and aerodromes. All of which would contribute to increasing productivity and economic opportunities in remote and regional areas. P a g e 14

18 CASE STUDY: REGIONAL ROAD AND TRANSPORT GROUPS (QLD) Queensland s Department of Transport and Main Roads partners with local government through 17 Regional Roads and Transport Groups (under the Roads and Transport Alliance) to jointly invest in transport infrastructure improvements. The Transport Infrastructure Development Scheme (TIDS) provides $31.2 million annually through Regional Roads and Transport Groups to be matched by local government in the construction or upgrade of transport infrastructure with regional significance. TIDS can also be used to enhance the safety and accessibility of regional and remote airports. Regional Roads and Transport Groups have been successful in developing regional transport infrastructure strategies to support business cases for additional State and Australian Government funding. Five Aboriginal Shire Councils have recently joined Regional Roads and Transport Groups to partner with neighbouring councils in improving their asset management and project delivery capabilities, and to directly manage their ATSI TIDS funding. CASE STUDY: ROYALTIES FOR REGIONS INITIATIVE (WA) The Royalties for Regions Initiative recognises that sustainable development of regional WA is vital to the State s future. This unique scheme promotes and facilitates economic, business and social development in remote and regional areas by setting aside 25% of mining and petroleum royalty revenue specifically for that purpose. This Initiative is underpinned by six key policy objectives: building capacity in regional communities; retaining benefits in regional communities; improving services to regional communities; attaining sustainability; expanding opportunity; and growing prosperity. $6.1 billion has been budgeted through the Royalties for Regions Fund for the period to Funding is distributed across nine regions of WA based on an agreed formula. CASE STUDY: STRZELECKI TRACK (SA, QLD & AUSTRALIAN GOVERNMENT) Collaboration continues with SA Government, Petroleum sector and QLD Government to identify transport infrastructure priorities for economic development in this remote part of Australia. The SA Government continues to seek approval and funding methodologies for the Strzelecki Track upgrade and sealing project, which aims to benefit petroleum industry, pastoral industry, outback communities, and tourism. Meeting the transport infrastructure needs of industry and private sector is important for productivity and the overall economy of Australia; however this should not be at the expense of addressing specific infrastructure needs of remote communities. While governments have invested in remote and regional transport infrastructure over the past years, more is required to address the transport infrastructure needs of remote Australia. The isolation experienced by remote communities requires a concerted effort to improve community access to the various transport modes, particularly roads. Connecting remote communities is not only important for employment and economic reasons but also for social inclusiveness. This Strategy sees the establishment of a national rural and remote arterial road network development plan that focuses on key regional strategic secondary roads to complement the national freight networks and associated strategies as a key to improving economic and social connectedness of remote communities. Focusing on a national rural and remote arterial road network that complements the national freight routes will create opportunities for a range of industries and have flow on economic benefits to remote businesses and the wider community. For example, ensuring secondary roads are up to standard will increase opportunities for greater dispersal of tourists across remote and regional areas. P a g e 15

19 3.1.4 Actions to be taken The following actions 2 will be undertaken to help improve transport infrastructure for remote and regional areas. The table below also shows the relationship between the Strategy s actions, strategic areas of focus and desired long term outcomes. DESIRED OUTCOME ACTION STRATEGIC AREA OF FOCUS 1. Economic and social potential of remote and regional areas is unlocked, and contribution toward Australia s economic growth further increased. Develop a national framework that facilitates private sector investment and developer contributions to support remote and regional transport infrastructure construction projects and transport services. Increasing investment opportunities in transport infrastructure and related services through appropriate funding methodology and investment partnerships. 2. Growth of transport infrastructure and services in remote and regional areas is sustainable and reflects the needs of local residents and businesses. 3. Access to employment, education, health services and economic opportunities across remote and regional areas is enhanced through existence of appropriate transport infrastructure and services. 4. Economic and social potential of remote and regional areas is unlocked, and contribution toward Australia s economic growth further increased. Investigate the impact of establishing a national infrastructure funding allocation framework including dedicated funding streams and appropriate assessment methodology for remote and regional transport infrastructure that takes into account the unique circumstances of these areas and establish if necessary. Establish national infrastructure planning and assessment guidelines to ensure whole of life costs and sustainability are determined in transport infrastructure design, and infrastructure is fit for purpose and can be maintained to an appropriate standard once constructed. Establish a national rural and remote arterial road network development plan that focusses on key regional strategic secondary roads to complement the national freight network and associated strategies. Increasing investment opportunities in transport infrastructure and related services through appropriate funding methodology and investment partnerships. Infrastructure design and quality are appropriate to remote and regional environment, including needs of local communities and businesses operating in these areas. Infrastructure planning and development takes into account maintenance costs. Infrastructure design and quality are appropriate to remote and regional environment, including needs of local communities and businesses operating in these areas. 2 A detailed Implementation Plan will be developed for the Strategy as outlined under Section 1.4. P a g e 16

20 3.2 Strategic Area 2: Transport Services Objective Australians living and businesses operating in remote and regional areas have access to transport services that meet their needs, provide sustainable economic and employment opportunities, and take into account the higher cost of service provision in remote and regional areas Stakeholder priorities Stakeholder priorities in this area include: Better access to transport services through improved coordination across transport modes and jurisdictions. Increasing economic and employment opportunities for local communities. Higher cost of service provision in remote and regional areas taken into account in service design and funding. Improving access to telecommunication services on remote and regional transport routes Challenges and opportunities Poor or non-existent public transport between remote communities and regional service towns can limit access to employment, education, health care and other services. Local communities expect to have access to basic essential services either locally or by travelling to nearby towns. While governments provide financial and regulatory support for some long distance passenger services so that transport-disadvantaged communities have year-round access to a range of services, this is often done at a considerable cost. SNAPSHOT: LONG DISTANCE TRAVEL: AUSTRALIAN GOVERNMENT SUPPORT Government support (tax incentives, subsidies or funding for infrastructure upgrades) for remote and regional infrastructure are provided at considerable cost to the budget bottom line. For example, the Australian Government s funding initiatives include the $210 million Cape York Regional Package, $9 million Regional Airstrip Upgrades, $33 million Outback Way, $90 million Regional Roads Productivity Package, $1.75 billion extension of the Roads to Recovery Program and some $12 million per annum for the Remote Air Services Subsidy Scheme and additional support of $1 million per annum for regional aviation by introducing a targeted Enroute Scheme for regional commercial airlines. The fiscal constraints make it essential to explore other means that can complement these efforts to ensure remote communities are not economically and socially disconnected. Governments cannot do it on its own and must look at ways that maximise and build on existing services. Developing a community transport framework that supports the use of existing services and resources to develop sustainable community driven passenger services will help improve linkages between remote communities and towns providing services. This is particularly important given that the proportion of households in very remote areas that have no motor vehicle is 15.7 per cent compared to 9.2 per cent of households in major cities. The following table provides some indication of the extent to which households by regional/remoteness class may encounter access difficulties through a lack of private transport. P a g e 17